The Executor of an estate allowed the insurance policy on a house owned by the estate to expire. The house was subsequently damaged in an earthquake. The earthquake damage caused the house’s value to drop by $205,000.

The executor was found liable to pay $205,000 to remedy the damage.

It was held that there was an obvious risk of the house being damaged as another earthquake had occurred in the same area just one month before the insurance policy expired.

Unfortunately the Executor’s failure to insure was simply an oversight, and he did not have a defence for his actions, so he was held liable to pay for the damage to the property.

As the Executor of an estate you must make sure that the estate’s assets, particularly property, are appropriately insured at all times.  If not, you may be held liable for any damage that occurs while the property is uninsured. 

If you are an Executor and have concerns about how to carry out your responsibilities, including insuring estate assets, see your lawyer or other legal advisor for advice.